Starting a business in Dubai is an aspiration for numerous entrepreneurs, and the UAE has been actively supporting investors and business owners in launching and expanding their ventures. The prospect of establishing a business in Dubai has become increasingly attractive due to the significant economic growth and infrastructure development that the region has witnessed in recent years.
When embarking on the journey of setting up a business in Dubai, it is crucial to determine the appropriate structure for your business entity. Various options are available, including sole proprietorships, partnerships, limited liability companies (LLCs), and joint-stock companies. One such option to consider is a general partnership firm.
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What is General Partnership in Dubai?
A General Partnership is a contractual arrangement between two or more partners, wherein each partner assumes joint and several liability for the company’s debts and obligations, up to the extent of their personal assets. It is important to note that the establishment of a General Partnership in Dubai is restricted to UAE nationals only.
Formation of a General Partnership Company
In a general partnership, each partner possesses the right to actively participate in the management and decision-making processes of the business. This collaborative structure allows for shared responsibilities and input from all partners involved. However, it’s important to be aware of the circumstances that can lead to the dissolution of a partnership, such as a partner’s withdrawal, bankruptcy, insanity, or death.
Features of a General Partnership in Dubai
- The company shares may not be represented in negotiable certificates
- Partners are severally responsible in all their money for the company’s obligations and any agreement to the contrary might not be made against third parties
- The company administration shall be undertaken by all partners, unless the company contract or an independent contract assigns the administration to a partner or to a non partner party
- Each general partner may own any share of the business. There is no minimum or maximum level of ownership for any partner
- A partnership company can appoint one manager as per the DED business regulations
- A general partnership company in Dubai can have more than one branch. Each may undertake one or all of the activities included in the main business license
Process of Starting a General Partnership Company in Dubai
The process of starting a general partnership company in Dubai is relatively easy. However, if this is the first time you are starting a business in the UAE, then it is perfectly normal to feel a bit lost. This is where the Company Setup experts come to the rescue.
We will start your general partnership company in Dubai and all you need to do is provide the required documents.
Here are the steps you need to follow in order to start a general partnership company in Dubai:
- Select a trading name for the general partnership following all the guidelines for naming the company.
- Complete the application for the registration form through the register.
- Each partner must sign the application form.
- Obtain an office space for the business.
- Submit all the required documents and complete the payment to the Department of Economic Development in Dubai.
Documents Required to Start a General Partnership Company in Dubai
There are a few documents that you need to provide to the Department of Economic Development in Dubai during your general partnership company formation. These documents are required because of regulatory purposes.
They will help identify the partners in the company and help you with any legal issues during the lifetime of your company.
Here are the documents required when starting a general partnership company in Dubai:
- Passport copies and Emirate IDs of all the partners and managers in the business.
- The initial approval certificate from the Department of Economic Development in Dubai.
- The company trade name registration certificate.
- A No Objection Certificate from all the partners in the business.
- Office address of the company.
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Frequently Asked Questions on General Partnership Company Formation in Dubai
What is a general business partnership?
A general business partnership in the UAE is a business consisting of multiple owners who are Emiratis. To clarify, Emiratis are locals who are citizens of the UAE. It is a type of company structure that has unlimited liabilities.
This means that the partners in the business can use their personal properties to get loans for the business. However, in case of bankruptcy, the partners must pay the creditors of the business from their personal assets.
How is a General Partnership Formed?
A general partnership company can be formed by two or more UAE nationals. Additionally, each of the general partners involved in the company will have equal rights in the management and decision-making process of the company.
Any UAE nationals may form a general partnership by registering with the Department of Economic Development in Dubai. Additionally, you must select a trading name for your company and the name must end with the word ‘Partnership’.
What is the Structure of a General Partnership?
The general partnership is a company structure that you can choose when starting a business in the UAE. To clarify, it is a separate legal structure that is different from other structures like Sole Proprietorship and Limited Liability Companies.
Unlike an LLC, a general partnership will have unlimited liability. It is similar to a Sole Proprietorship except for the fact that the company will have multiple owners and decision-makers.
What is a general partnership example?
Good examples of general partnerships would be law firms. For example, two lawyers named Fred and Corey may form a law firm with the general partnership company structure. They may choose to form a partnership instead of working alone because each of them has different expertise.
So, together they will have an edge over the competition in the market. Besides law firms, accountancy firms are also good examples of general partnerships.
What is the legal name of a general partnership?
You must follow a few guidelines when selecting the name of your general partnership in the UAE. For example, the name of the General Partnership Company must end with the word ‘Partnership’.
Additionally, the company name must contain at least one word from the names of all the partners in the company. Last but not the least, you can add a word for branding purposes.
What are the three key elements of a general partnership?
There are a few aspects of the company structure that makes up a general partnership. First and foremost, there will be two or more owners in the company. Additionally, there will be an option to dissolve the partnership if one or more of the partners decide to leave the partnership or in the event of their death.
Second, the name of the general partnership must contain the names of all the partners in the business and it must end with the word ‘Partnership’. Last but not the least, the general partnership company will have unlimited liability.
Why general partnership is the best form of business?
Thanks to the easy business setup process and various tax benefits, general partnerships are often considered the best form of business. Additionally, it is one of the most popular forms of legal structure in the UAE.
This is because of two main reasons. First, it is very easy to form and dissolve. Second, with the general partnership company structure, the business can have multiple owners.
As a result, the business can get a boost with a bigger starting capital and more expertise. Because of these advantages, a general partnership is considered one of the best forms of business today.
How can Company Setup Consultants help you?
If you want to start a general partnership company in Dubai but you do not know where to get started, then you are in the right place. This is because Company Setup Consultants have helped numerous entrepreneurs and investors from all over the world get started in the UAE. Contact us today and hit the ground running.
To Speak with our Experienced Business Consultants for further information and assistance, call us at +971582595164. Send a WhatsApp Message for Chat Query on +971 582595164 or email us at info@companysetup.ae.